TOKYO (AP) — Asian shares traded mixed Tuesday as eyes turned to U.S. data reports set for release later in the week that are likely to impact whether the Federal Reservecuts interest rates at its next meeting.
Japan's benchmark Nikkei 225 erased earlier gains to finish 0.5% lower at 43,459.29, as political uncertainty continued after Prime Minister Shigeru Ishiba said over the weekend that he planned to step down. Who will replace him is still uncertain and may take weeks to decide. The benchmark momentarily
surpassed the 44,000 mark.
Anticipation over one of the likely candidates, Sanae Takaichi, a hawkish legislator, sent defense issues higher in Tokyo trading. Mitsubishi Heavy Industries rose 0.3%, IHI added 1.0% and Kawasaki Heavy 0.4%. Veteran ruling party legislator Toshimitsu Motegi has indicated he wants to run, and other expected contenders include Farm Minister Shinjiro Koizumi and Chief Cabinet Secretary Yoshimasa Hayashi. All are members of the ruling Liberal Democratic Party, which will need coalition partners to stay in power.
Australia's S&P/ASX 200 declined 0.6% to 8,793.60. South Korea's Kospi climbed 1.1% to 3,253.57. Hong Kong's Hang Seng surged 0.7% to 25,812.82, while the Shanghai Composite fell 0.5% to 3,808.31. The mixed trading followed a stronger opening in Asia.
“Asian markets opened Tuesday with momentum, riding Wall Street’s conviction that Fed cuts are no longer a question of if but how many. Nearly three reductions are now being priced before year-end. That expectation is washing through global markets like a spring tide,” said Stephen Innes, managing partner at SPI Asset Management.
On Wall Street, the S&P 500 added 0.2% and finished just below its record set last week. The Dow Jones Industrial Average rose 114 points, or 0.3%, and the Nasdaq composite climbed 0.5% to its own all-time high.
AppLovin and Robinhood Markets helped lead the market after learning they will join the S&P 500 index later this month, along with Emcor Group. Many investment funds directly mimic the index or at least compare their performance against it, so a stock’s joining the list of the 500 largest companies can draw investors’ dollars immediately. AppLovin climbed 11.6% and Robinhood jumped 15.8% while Emcor slipped 0.6%.
EchoStar jumped 19.9% after saying it agreed to sell spectrum licenses to Elon Musk’s SpaceX for $17 billion in cash and stock. SpaceX also agreed to pay for roughly $2 billion of interest payments on EchoStar debt through November 2027.
The deal will help SpaceX’s Starlink business develop direct-to-cell service, and it knocked down stocks of several telecoms. Verizon sank 2.4% and AT&T dropped 2.3%.
All told, the S&P 500 rose 13.65 points to 6,495.15. The Dow Jones Industrial Average added 114.09 to 45,514.95, and the Nasdaq composite climbed 98.31 to 21,798.70 and topped its prior all-time high set in August.
Trading across most of the market was relatively quiet ahead of updates coming later this week on the economy and inflation. They could alter expectations among traders, who at the moment are unanimously forecasting the Fed will cut its main interest rate for the first time this year at its meeting two Wednesdays from now.
The Fed has been more worried about the potential of inflation worsening because of President Donald Trump’s tariffs than about the job market. But a slew of recent reports showing the U.S. job market is slowing may be changing minds.
On Tuesday, the U.S. government will release preliminary revisions for job growth numbers reported through March, and it could show that hiring was weaker than earlier thought.
Reports on inflation will follow on Wednesday and Thursday, showing how much prices rose last month at wholesale and consumer levels. If inflation proves to be worse than expected, it could tie the Fed’s hands.
In the bond market, Treasury yields continued to ease as expectations remain high for the Fed to cut interest rates. The yield on the 10-year Treasury fell to 4.04% from 4.10% late Friday and from 4.28% last Tuesday.
In energy trading, benchmark U.S. crude gained 40 cents to $62.66 a barrel. Brent crude, the international standard, added 42 cents to $66.44 a barrel.
In currency trading, the U.S. dollar slipped to 146.96 Japanese yen from 147.51 yen. The euro cost $1.1777, up from $1.1765. Gold has been rising as a safe investment, surpassing the $3,600 mark. Gold has been gaining on the back of a falling dollar and anticipation for the Fed's rate cut.
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AP Business Writer Stan Choe contributed.
